Give some credit to House Speaker Jill Krowinski. She did the difficult work in offering a proposal to reform the state’s pension system. She had the moral courage necessary to launch the debate. She took the fall for House Democrats by withdrawing it, sparing them the political recrimination in full bloom. She continues to push ahead. She’s put in place a summer committee whose responsibility it will be to have a proposal on the table for legislators to consider next January.
Still, it’s not difficult to imagine the thoughts running through Ms. Krowinski’s mind, and the disappointment it will be another year before the issue of the state’s pension system is considered, another year where the debt grows and solutions become more difficult to reach.
When a proposed solution to an issue of this magnitude is put into legislative form, and then introduced, it’s assumed the ducks are somewhat in line. In this case it’s assumed that the unions were generally aware of the proposal’s details, and it’s assumed the political forces in both the House and Senate were aware and prepared to defend. They are on the same team, right? Ms. Krowinski also had every reason to expect the proposal to be considered as a beginning point, something to be debated, added to and subtracted from. It was understood the bill introduced would not be the bill passed. The Legislature is, after all, a deliberative body.
Ms. Krowinski also presumed, understandably, that her proposal would be given serious consideration given the pensions’ poorhealth. She was following the lead of State Treasurer Beth Pearce who months earlier said to fix the pensions would require union members to work longer, pay more and to receive less. The numbers were laid out, and they were ugly. We had accrued a massive $604 million shortfall in a single year and were staring at a $5.9 billion gap between assets and future liabilities. If that is not a crisis, what is?
The inevitability of it all made it clear to Ms. Krowinski that the pension can could no longer be kicked down the road.
The political repercussions became clear almost immediately. The unions may have understood there was a problem but Ms. Krowinski’s bill was a reality slap for which they were not prepared. Was she really going to follow the State Treasurer’s recommendation? They went into full revolt. Letters. Demonstrations. Threats. Full-throated screams of betrayal. This was a proposal coming from their Democratic “friends?” Have they forgotten how the system works? The Democratic support crumbled like a fist of dry clay. If Ms. Krowinski had the support of the party’s leadership when she introduced the bill, the unions’ fury chased them into the closets waving their white flags of surrender. She had nothing left and rather than embrace an ignominious defeat she withdrew the bill.
A summer study has been announced. It will include legislators, union members and the Scott administration. The task is to have something in place for legislators to consider in January when the new session convenes.
For the summer committee the facts to consider will not have changed. If the committee comes up with a plan that checks the necessary boxes, it will be painful. It can’t be avoided. The multi-billion dollar gap between assets and liabilities can’t be bridged without making long-term systemic changes. It can’t be met with one-time stimulus money, at almost any level. It can’t be solved with a tax on the rich, there aren’t enough rich people in Vermont to make it work and the Legislature has already voted overwhelmingly in opposition to such a thought.
Then, there is the raw politics of the issue: The unions won this round. Big time. It wasn’t close. Next year is an election year which will make already skittish legislators even more so. The temptation for legislators will be to pretend that $150 million in stimulus money [or more], and an improved performance in how the pension funds are invested will do the trick. The unions have no reason to compromise. They’ve flexed their muscle and it got them what they wanted. They will do so again. Why wouldn’t they? They leave this battle stronger than they were before the bill was introduced.
That political reality acknowledged, the mission of the summer study group should be one of transparency and education, two qualities that should extend beyond the committee to the general public. The majority of Vermonters haven’t been given enough information about the pension fund crisis, and how it impacts their pocketbooks, to grasp the seriousness of the issue. Even the unions’ rank and file are largely unaware of how grim the forecast is for their future pensions if we do nothing.
As we have said from the outset, it’s an ugly situation and it will get uglier each year progress is delayed. Ms. Krowinski put her speakership on the line in showing the courage to even step into this ring. It’s questionable as to whether she will be able to keep her job, which is lamentable given the fact the issue can’t be dodged and it’s the job of our legislators to solve problems, not duck them.
What Ms. Krowinski can do is to push the debate out into the open, educate the public, and specify the goals that need to be met. The Democrats are in control of both the House and Senate; it’s on their watch that the pension issue will be addressed, or not. It’s not the responsibility of Gov. Phil Scott to be the tip of the spear shielding them, but it is his responsibility to be supportive and to help in making sure the issue is understood. We will spend an additional $96 million next year to deal with the surprise $604 million bill we got this year. The total bill now runs about $316 million, which comes out of the general fund.
Doesn’t that merit a reality check?
by Emerson Lynn